In classic SBA style, there’s been a lot of updates on PPP over the last few days – and we’re sure your members will benefit from the run down from Abrigo. Whether they decide to partner with Abrigo or not for origination of these loans, these resources will help all of your members navigate this round of PPP.
Materials to share:
Abrigo has begun supporting community financial institutions participating in the latest round of PPP through its Sageworks SBA Lending solution. Customers leveraging the solution can simplify and automate the underwriting processes of PPP so you can quickly get money into the hands of small business owners. Learn how you can get implemented and begin automating PPP loans within 48 hours.
Press Release – Abrigo is Ready & Customers are Live
Webinar Recording – What’s Changed with PPP in 2021
PPP Live Demo – First is Tuesday (1/12) at 3 PM EST, and we’ll be adding additional dates and times each day
Blog post – Lender guidance for borrowers wanting a second loan
WASHINGTON – The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said Administrator Jovita Carranza. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”
“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19. We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”
Key PPP updates include:
The new guidance released includes:
For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
The Small Business Administration last night issued several documents on the next round of the Paycheck Protection Program authorized by the end-of-year stimulus package. Here's the latest.
The new documents include:
An interim final rule on the PPP as amended by the Economic Aid Act. An interim final rule on second-draw PPP loans. Guidance on accessing capital for minority-, underserved-, veteran- and women-owned businesses. Following the passage of ICBA-advocated stimulus provisions simplifying PPP loan forgiveness and supporting a new round of PPP lending, the interim rules include answers to questions about registration, loan underwriting, fees, electronic submissions, reporting disbursements, agent fees, and more.
The interim rules note that second-draw PPP loans generally are guaranteed by the SBA under the same terms as first-draw loans, though these borrowers are generally required to have 300 or fewer employees, exhausted their first-round funds and a 25 percent or greater revenue reduction from 2019 to 2020.
The guidance notes that the Economic Aid Act set aside funds for lending by community financial institutions, first-draw PPP borrowers, and the smallest businesses. Further, it says the SBA will accept PPP loan applications only from community financial institutions for at least the first two days after the PPP loan portal reopens.
The guidance also says PPP lenders should encourage borrowers to complete a new demographic reporting section on the PPP borrower application to help the program reach underserved, minority-owned, veteran-owned, and women-owned businesses.
While ICBA continues studying these documents, additional information is available on the SBA and Treasury PPP pages, and Independent Bankers Association of Texas matrix of the law's PPP updates, and ICBA's summary of the stimulus package's community banking provisions.
ICBA's next Community Bank Briefing featuring 2021 updates is scheduled for 2 p.m. (Eastern time) tomorrow, Jan. 8. During the 60-minute webinar, ICBA experts will address the important SBA actions and discuss legislative developments. Participants are encouraged to submit questions prior to the briefing or bring them to the briefing as the ICBA team will answer questions from community bankers. Learn more and register.
Meanwhile, we will continue to provide you the very latest information as it becomes available.
With the Senate bringing two separate measures that include Paycheck Protection Program forgiveness simplification to a vote starting today, ICBA continues calling on community bankers and their small-business contacts to weigh in with lawmakers.
ICBA's Be Heard grassroots action center allows community bankers and small-business owners to urge Congress to address the deduction of Economic Injury Disaster Loan advances from PPP loan forgiveness. ICBA encourages community bankers to direct borrowers to the small-business alert.
While borrowers may receive up to a $10,000 EIDL advance, those funds will be deducted from PPP loan forgiveness. ICBA has repeatedly raised this issue with Congress and the SBA, reiterating it Monday in a new joint message to lawmakers.
Meanwhile, ICBA continues calling on community bankers and small-business owners to urge Congress to immediately pass bipartisan legislation to simplify PPP forgiveness.
While the Senate measures are not expected to pass amid ongoing stimulus talks, ICBA continually works to ensure these PPP priorities remain a key part of the debate.
Politico reported on the frustrations of community banks and other lenders with the Paycheck Protection Program's loan-forgiveness process.
The report notes that while policymakers pledged to forgive PPP loans if employers maintained payroll, the SBA has yet to forgive any of the program's $525 billion in loans, which is creating headwinds for borrowers and lenders.
“No bank I know anywhere in the country has received any money from the SBA," said Brad Bolton, ICBA vice chairman and president and CEO of Community Spirit Bank in in Red Bay, Ala.
ICBA continues urging community bankers to call their members of Congress and urge support for legislation to simplify PPP loan forgiveness. The bipartisan Paycheck Protection Small Business Forgiveness Act (H.R. 7777/S. 4117) would provide simplified forgiveness for PPP loans of $150,000 or less.
ICBA last week continued its campaign for simplified forgiveness in a written statement for a House subcommittee hearing, noting a Government Accountability Office report that complex PPP forgiveness applications could take up to 15 hours for borrowers to complete and 75 hours for lenders to review.
ICBA: Exclude PPP loans from asset calculationsICBA called on Congress to direct federal regulators to exclude Paycheck Protection Program loans from bank and bank holding company asset threshold calculations.
In letters to House and Senate leaders, ICBA noted that the surge of PPP loans has swelled the balance sheets of community banks. Absent a legislative fix, asset-size growth will inadvertently push many community bankers over regulatory thresholds and subject them to additional supervision, regulations, and costs.
Whereas banks normally have advanced notice that they are close to crossing an asset threshold and invest in a strategic plan to comply with additional regulations, rapid asset increases due to PPP lending have caused temporary balance sheet inflation.
"This is an exceptional circumstance and bank regulation must be flexible enough to account for it rationally and ensure that PPP lenders are not punished with regulatory costs simply for their participation in an emergency program," ICBA wrote.
The Independent Community Bankers of America (ICBA) today said recently released data show that community banks are the unequivocal leaders of the U.S. economic recovery due to their outsized role as providers of Paycheck Protection Program (PPP) small-business loans.
According to the Small Business Administration data, community banks:
ICBA and community bankers continue calling on Congress to advance needed PPP reforms in the next stimulus package.
ICBA urges Congress to include recommendations in the next legislative package to create relief for American small businesses
With Congress continuing to debate the next economic stimulus package, community bankers can continue using ICBA's Be Heard grassroots action center to weigh in with recommendations.
ICBA's custom message encourages lawmakers to advance a more straightforward approach to Paycheck Protection Program loan forgiveness as well as capital, accounting, and tax relief.
Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza are scheduled to testify before the House Small Business Committee this Friday on the federal pandemic response.
ICBA last week released talking points and a sample letter to borrowers about the agencies' release of information about individual PPP loans. ICBA also offers a sample press release and op-ed on PPP efforts on its Tell Your Story toolkit.
Following the SBA and Treasury Department release of information about individual Paycheck Protection Program loans, ICBA released talking points and a sample letter to PPP borrowers about the agency announcement.
The member-protected talking points and letter template note that the federal agencies—not community banks—released the loan-level information. The resources are available to help community banks who receive questions from PPP borrowers.
The SBA and Treasury released business names, addresses, lender names, and other information for loans of $150,000 and up, which account for nearly three-quarters of the dollar volume of PPP loans. For loans below $150,000, the agencies will not release business names but will report loan totals, aggregated by ZIP code, industry, business type, and various demographic categories.
Overall, SBA and Treasury said the 4.9 million PPP loans have supported more than 51 million jobs and more than 80 percent of small-business employees, with 27 percent of program funds reaching low- and moderate-income communities.
The data release follows the extension of the PPP application deadline until Aug. 8 shortly after the SBA stopped accepting PPP applications last week. The agency has roughly $130 billion in remaining PPP funds.
ICBA continues urging community bankers to use its Be Heard grassroots action center to recommend reforms to include in the next economic relief package, which Congress is debating now. Community bankers can also access ICBA’s Tell Your Story toolkit for a sample press release and op-ed to share the positive impact of their PPP efforts.
The data release also includes overall statistics regarding dollars lent per state, loan amounts, top lenders, and distribution by industry. The loans have reached diverse communities proportionally, across all income levels and demographics.
In addition, the data provides information regarding the sizes of participating lenders and participation by community development financial institutions, minority depository institutions, Farm Credit System institutions, fintechs and other nonbanks, and other types of lenders. It further contains data showing the reach of the program in underserved communities, rural communities, historically underutilized business zones (HUBZones), and participation by religious, grantmaking, civil, professional, and other similar organizations.
View the Paycheck Protection Program Report through June 30th.
The Senate passed legislation to extend the Paycheck Protection Program application deadline until Aug. 8, sending it to the House hours before the SBA stopped accepting PPP applications.
The bill, which the Senate passed via unanimous consent, needs to be approved by the House and signed by the president to take effect. After the SBA has approved $520.6 billion in PPP loans through Tuesday evening, the program has roughly $130 billion in remaining funds.
The Senate bill also would decouple the PPP reauthorization from the SBA's 7(a) program to avoid shutting it down when the PPP expires. Politico reported that the Senate extended the PPP into August to give Congress time to pass the next economic relief package, which lawmakers are debating now.
ICBA continues calling on community bankers to use its Be Heard grassroots action center to provide lawmakers with comprehensive policy recommendations as Congress considers the next relief package.
From the Treasury
Jun 12, 2020 via ICBA
The Small Business Administration issued new Paycheck Protection Program application forms and an interim final rule implementing ICBA-advocated reforms to the program.
Among its policies, the law extends from eight to 24 weeks the amount of time borrowers have to spend PPP funds while remaining eligible for forgiveness and lowers the amount that must be spent on payroll costs from 75 percent to 60 percent.
The rule notes that:
The Independent Community Bankers of America® (ICBA) called on the Treasury Department and Small Business Administration to make the Paycheck Protection Program loan-forgiveness process less complex and onerous for borrowers and lenders.
In a letter to the agencies, ICBA said an unnecessarily complex forgiveness process compromises the PPP's potential to facilitate a strong economic and jobs recovery.
"Borrowers should not have to hire accountants at expensive fees to assist with loan forgiveness," ICBA President and CEO Rebeca Romero Rainey wrote. "What’s more, borrowers whose first language is not English are struggling with the complex forgiveness forms and procedures and would greatly benefit from simplification."
With lenders under $50 billion accounting for more than 65 percent of approved loans and more than 63 percent of the approved dollar amount through two rounds of the PPP, ICBA called for:
ICBA is calling on community bankers to provide Congress with policy recommendations to make the Paycheck Protection Program more workable for lenders and borrowers.
With Congress considering needed changes to the program, ICBA's Be Heard grassroots action center offers a customizable letter to lawmakers on pro-community bank provisions.
CCBN is recommending the Abrigo Paycheck Protection Program (PPP) Forgiveness and Administration solution for streamlining and automating this next phase of the process. We appreciate everyone that participated in last week's webinar with Abrigo, and we encourage anyone who did not get a chance to attend to see a recording of the demonstration here. We know you are eager for as much information as possible on the PPP loan forgiveness and administration process, especially as new guidance becomes available.
Abrigo has recently published a complete loan forgiveness timeline, as well as a checklist to offer your borrowers in order to make the forgiveness process as seamless and efficient as possible. For additional resources, or to learn more about the PPP Forgiveness and Administration solution, please reach out to Laura Wahl at email@example.com.
As the environment in response to Covid-19 continues to be challenging, the California Community Banking Network (CCBN) is asking for relief and clarity from policymakers in order for community banks to focus on their customers and communities and further the overarching goal of reviving the country.
CCBN applauds the recent executive order signed by President Trump directing agencies to use all emergency authorities to swiftly rescind or temporarily waive restrictive regulations and is hopeful more can be done to help ease burdens on community banks and small businesses.
CCBN also supports the Independent Community Bankers of America’s (ICBA) recent letter to Congress urging inclusions to the next legislative package, which include recommendations addressing the Paycheck Protection Program (PPP).
SBA data shows the tremendous role community banks have played, funding more than half of the loans in the first PPP round. Community banks have been working tirelessly to fund and ensure the survival of small businesses throughout the country and continue to navigate through the PPP.
Current PPP guidance and criteria remain unclear and as community banks service these loans it is crucial that relief from any red tape is lifted to allow community banks to provide essential funding to keep small businesses alive. More specifically relaxing the PPP criteria and simplifying the forgiveness documentation will greatly alleviate the daunting challenges of this already obscure process.
As community banks continue to track, report and fund these loans, more reprieve and guidance is necessary. Community banks are seeking the reasonable discretion and prudence of regulatory agencies as they support small businesses and aid in economic recovery.
The Small Business Administration issued an interim final rule extending the repayment date for the Paycheck Protection Program certification safe harbor. Under the revised policy, any borrower that applied for a PPP loan prior to April 24 and repaid the loan in full by May 18 will be deemed by SBA to have made the required certification in good faith. The deadline was previously May 14.
The rule also codifies the deadline extension for submitting the initial SBA Form 1502, for which the agency has yet to provide detailed guidance. As the SBA announced in the latest update to its PPP frequently asked questions, that deadline is now the later of: (1) May 29, 2020, or (2) 10 calendar days after disbursement or cancellation of the PPP loan.
Lenders are required to submit the form to report on PPP loans and collect the processing fees on fully disbursed loans to which they are entitled, though SBA 7(a) Fiscal and Transfer Agent Colson Services Corp. says in an online advisory that lenders should not report their PPP loans on Form 1502 until the SBA has released additional guidance.
Additional PPP guidance and resources are available on Treasury’s PPP webpage and ICBA's COVID-19 resource center.
The Small Business Administration's guidance on authorized uses of Paycheck Protection Program loans does not align with the CARES Act, the agency's inspector general reported.
The IG report notes that while the law does not set any restrictions on the portion of loans that must be used for payroll, an SBA interim final rule sets a 75 percent threshold.
The report also notes that the SBA's maturity term of two years undershoots the law's maximum term of up to 10 years, which could result in an unintended burden to PPP borrowers.
Read the report
ICBA called on the Treasury Department and Small Business Administration to provide additional guidance on the process for obtaining forgiveness of Paycheck Protection Program loans.
In a letter, ICBA urged the agencies to:
SBA and Treasury value all lenders and their small business customers.
To ensure access to the PPP loan program for the smallest lenders and their small business customers, starting at 4 p.m. today EDT through 11:59 p.m. EDT, SBA systems will only accept loans from lending institutions with asset sizes less than $1 billion dollars.
Please note, lending institutions with asset sizes less than $1 billion will still be able to submit PPP loans outside of this time frame. Please also note that lenders with asset sizes greater than $1 billion will be able to submit loans outside of today’s 4pm -11:59pm EDT reserved processing time.
This reserved processing time applies today April 29, 2020. SBA and Treasury will evaluate whether to create a similar reserved time again in the future.
SBA and Treasury continue to monitor loan system performance and will continue to provide frequent updates to the lending community.
OriTrust's PPP Fast Application is a powerful bank developed tool that can help its members fast-track PPP lending and is very straightforward and simple to use. It helps with making sure the bank is collecting all the required information and with the ongoing monitoring of information to ensure each borrower obtains loan forgiveness.